Queue of worthy suitors to redevelop Six Flags site proves short

Last month, when proposals for redeveloping the abandoned Six Flags amusement park site in eastern New Orleans were unveiled, two things became clear: Interest in the site was far from overwhelming, and if it is resurrected, it will likely have a predominantly consumer component. Neither of those things seemed to surprise real estate and economic developers familiar with the site who point to the current economic climate and the site's shaky past, but consider the plans now under consideration promising.

Chris Granger, The Times-PicayuneEight proposals for redeveloping the former Six Flags site in eastern New Orleans were submitted to the city. A committee cut the list of proposals that will move forward to two.

"It's not a low-risk decision, and it's not one that would draw many bidders," Wade Ragas, professor emeritus of finance at University of New Orleans and president of the firm Real Property Associates, said of the way potential developers likely evaluated the site. "This is still a very risky site. This is not a slam dunk."

The city committee assembled to determine the immediate future of the property, which has been neglected for more than six years, swiftly cut six of the redevelopment proposals it received -- narrowing the field from eight to two -- through a request for proposals, or RFP, process.

Many of the excluded projects didn't demonstrate the financial wherewithal to be able to carry out their projects, committee members said, even if some of the ideas were good.

And proposals that combined good ideas and financial feasibility were in short supply.

That is not unlike the interest the former amusement park has generated outside the RFP process, said Rod Miller, chief executive of the NOLA Business Alliance, the city's new public-private partnership for economic development.

Miller said he receives inquiries about the Six Flags site once or twice a month. They typically don't pan out for one of three reasons: The inquirer is well-intentioned but lacks the experience or expertise to develop, the inquirer expects a substantial contribution from the city, or the project doesn't appear to generate a significant return on investment for the community.

The site also is a tough sell because of its location.

"One of the challenges of that area is concentration," Miller said. Developing a site like that, particularly for any consumer attraction, requires population, foot traffic and other amenities. "That isn't really there right now. There are other concerns like blight that further exacerbate those challenges."

About 150 idle acres

The city of New Orleans has controlled the shuttered property since December 2009, when a Delaware court presiding over the bankruptcy of Six Flags Inc. agreed to allow the theme park operator to terminate its lease in exchange for cash payments to the city. Six Flags did not reopen the storm-marred park after Hurricane Katrina. New Orleans is servicing a $13 million debt on the property.

The Six Flags site is just more than 150 acres, 65 acres of them developed and 86 undeveloped.

In its request, the city pitches it as "ideal for a variety of commercial developments, either retail or entertainment oriented, or both." The RFP also makes specific mention of the site as a potential home for an "amusement park, a water park, a back lot for the growing New Orleans film industry, a family entertainment venue, a commercial-retail space or other appropriate use," excluding residential development.

That guidance is reflected in the proposals received. Of the eight, five listed a theme park as the primary development component. The site was largely eschewed by industrial interests during the RFP process, with the exception of a lone proposal for a power plant. That, despite Louisiana's No. 1 ranking in industrial site selection competitiveness in 2010, according to Site Selection Magazine.

Few manufacturing sniffs

The Six Flags site might be less attractive to industrial developers because of the high costs that would be involved in converting the space.

Industrial site selectors prefer "shovel-ready, pre-permitted sites with all utilities and approvals in place," said Ron Starner, executive director of the Industrial Asset Management Council and general manager and executive vice president of Conway Data Inc. and Site Selection Magazine.

The former Six Flags site has 20 rides, including four roller coasters and two water rides, and other building structures on it.

"It's attractive for a manufacturer, but would be too capital intensive," Miller said.

The Almonaster Corridor and the Michoud Assembly Facility are better picks and obvious choices because of their already developed heavy gas lines, access to waterways and available equipment, Miller said.

Ragas agreed.

"Louisiana is doing well in attracting manufacturing," Ragas said. "But it's attracting manufacturing to its waterways and to its river. I didn't expect to see light manufacturing or heavy manufacturing among the proposals."

Tempting leads

But Ragas said the two proposals that will move forward to the next round of discussion are both promising. One entrepreneur has proposed making the site an upscale outlet mall. The other has proposed another theme park.

Ragas is bullish on the former.

"If you're looking at cities where there's high traffic flows, growth in the economy and high levels of tourism, we're one of the only places around that doesn't have an outlet mall," Ragas said. "The prime outlet mall in Biloxi has done reasonably well, but has nowhere near the population or visitor base to support it that could be available here."

The broader theme park concept is "riskier," he said, but could be successful as long as it has a water park component.

"There's a reasonable chance of making that work," Ragas said.

As for why more viable proposals in the vein of those two weren't among the bunch the city received, Ragas said the economy is to blame.

"We are in an extremely serious recession still. From the view of most real estate developers, it is a very difficult marketplace to secure financing," Ragas said. "The site wasn't doing all that well before Katrina, So this is a high-risk decision by any developer."